World Narrows Eyes at Exec Pay

Germany's bailout plan imposes broader curbs than US version
By Clay Dillow,  Newser Staff
Posted Oct 21, 2008 12:30 PM CDT
The party is over: For executives in the financial sector worldwide, compensation is facing restrictions from governments.   (Getty Images)
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(Newser) – As governments worldwide implement bailouts for ailing financial institutions, the movement to curb executive compensation at those firms, and others, is gathering steam. Golden parachutes and pay practices that encourage excessive risk-taking are extremely unpopular in the public eye, the Wall Street Journal reports, and governments are finding restrictions necessary, one scholar says, “to get popular buy-in for these bailouts.”

Germany yesterday capped pay at $670,000 for officials at companies taking advantage of the plan, while Sweden pledged to simply “limit key executives’ compensation.” Australia is seeking similar restrictions, while France, the US, and UK have already adopted rules. And while some execs have voluntarily scaled back, analysts say the move could hurt firms in attracting and retaining talent.